Uber may sell off its Southeast Asia business to improve its finances as it prepares to IPO
Drew Angerer/Getty Images
- Uber is reportedly planning to sell its business in Southeast Asia to rival Grab.
- It's likely to receive equity in Grab as part of the deal.
- Uber's CEO said last week that operating in developing markets is an "optional investment" for the company.
Uber is reportedly preparing to sell its business in Southeast Asia to rival taxi company Grab, according to a report from CNBC. Uber would reportedly receive a "sizeable" stake in Grab as part of the deal, CNBC said.
Bloomberg wrote in 2017 that Uber was struggling to compete in Southeast Asia as Grab launched security features and took credit card payments, both things that Uber lacked. Uber, however, "feels like it's pushing a business model and an app designed in and for wealthier markets," Bloomberg wrote.
This wouldn't be the first time that Uber sold off one of its international businesses. In 2016 it merged its Chinese division with local competitor Didi. Didi agreed to make a $1 billion (£713 million) investment in Uber at a $68 billion (£48 billion) valuation, and Uber China's investors ended up owning 20% of the merged Chinese company, which was valued at $35 billion (£24 billion).
This could be a new route to profitability for Uber
Uber CEO Dara Khosrowshahi said at the Goldman Sachs Technology and Internet Conference in San Francisco last week that Uber could sell off underperforming parts of its business in order to improve its finances ahead of an IPO in 2019.
"Where we are now as of Q4 is the developed markets, the contribution from the developed markets, essentially pays for the overhead of the business, alright," Khosrowshahi said.
"Now, I include two things. And they're a lot of money for those two things: One is the amount that we are investing in developing markets, that's a significant negative but that is an optional investment for us. By the way, we think it should be on, it's going to be on for a while, right? That gets us negative," he said.
"And the big bets, autonomous etcetera also increase the negative. But if you just said, if someone says, 'Forget about all this stuff, all I want is the core and just sell all the stuff or stop investing all the stuff,' you would have a business that for a quarter was cash flow breakeven."
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas